Pension contribution & tax relief calculator
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See how much basic, higher and additional-rate tax relief is added to your personal pension or SIPP — and what your real out-of-pocket cost is.
- Real out-of-pocket cost
- £2,400.00
- Tax relief
- £1,600
- Effective discount
- 40%
| Amount you pay from your bank accountBasic-rate relief (20%) is added by the pension provider. | £3,200.00 |
|---|---|
| Basic-rate relief added by providerBrings the pot up to the gross £4,000.00. | +£800.00 |
| Extra reclaimable via Self AssessmentReclaimed against your tax bill; paid as a refund or via your tax code. | £800.00 |
| Real out-of-pocket cost | £2,400.00 |
2026/27. Assumes a personal pension or SIPP using relief at source. Workplace pensions on a 'net pay' basis already give you full relief through your payslip with nothing to reclaim. Annual Allowance (currently £60,000), tapered allowance for high earners and lifetime IHT rules from April 2027 may also apply.
Official rates & thresholds used
United Kingdom · tax year 2026/27 · last verified . These figures match the parameters embedded in this calculator.
| Parameter | Value | Notes |
|---|---|---|
| Pension annual allowance | £60,000 | Standard limit on tax-relieved pension contributions. Tapered for very high earners; reduced to MPAA of £10,000 after a flexible drawdown. |
| Money Purchase Annual Allowance (MPAA) | £10,000 | Triggered when you flexibly access a defined contribution pension. |
| Lump Sum Allowance | £268,275 | Maximum tax-free pension lump sum across your lifetime since 6 April 2024. |
| Tax relief at source (basic rate) | 20% | — |
| Extra relief claimable (higher rate) | 20% | Via Self Assessment on top of 20% at source. |
| Extra relief claimable (additional rate) | 25% | — |
Primary sources: HMRC; HMRC; HMRC. Always confirm live figures on gov.uk before acting.
How it works
- Under relief at source (used by most personal pensions and SIPPs), you pay 80% of the gross contribution from your bank account and the pension provider claims the other 20% from HMRC.
- If you are a higher-rate (40%) or additional-rate (45%) taxpayer, you can reclaim an extra 20% or 25% through your tax return — paid as a refund or by adjusting your tax code.
- Real out-of-pocket cost = the 80% you paid in, minus the extra higher / additional-rate relief you reclaim.
Common questions
- How do I claim the extra 20% as a higher-rate taxpayer?
- Through your Self Assessment tax return, or by writing to HMRC with details of your contributions if you do not file a return. HMRC usually adjusts your tax code or refunds the difference.
- Is the maximum I can pay £60,000?
- The Annual Allowance is £60,000 or 100% of your relevant UK earnings, whichever is lower. High earners may have a 'tapered' allowance as low as £10,000.
- What changes from April 2027?
- Most unused defined contribution pension funds will fall within Inheritance Tax from April 2027. This calculator only covers tax relief on contributions, not estate planning.